West-East Gas Pipeline pre-feasibility study announced

ACIL Allen, in conjunction with GHD, will conduct a pre-feasibility study on the West-East Gas Pipeline, the federal government announced this week.

The study is the first Commonwealth investigation of the potential for constructing a gas pipeline from Western Australia to link up to the east coast gas market.

In a joint statement, Energy Minister Josh Frydenberg and Finance Minister Mathias Cormann said findings from the study would inform a full feasibility study to test the viability of constructing a natural gas pipeline to provide additional gas supplies and increase competition in the east coast gas market.

ACIL Allen will be involved in the market and analysis component of the study, while GHD will take on the pipeline engineering and pipeline route assessment component.

“Together, the parties have deep and wide-ranging experience in gas markets and infrastructure and demonstrated through their bid the ability to deliver excellent analysis to inform future infrastructure decisions,” the statement said.

“The government is powering forward with a plan that will deliver an affordable, reliable and responsible energy system which will also help meet our international obligations.

“Improving the transparency, competitiveness and long-term security of Australia’s east coast gas market is a priority for the government as gas is a crucial component of the current and future energy mix to ensure we keep the lights on.”

ACIL Allen and GHD are due to provide the pre-feasibility report in March 2018.

APPEA chief executive Dr Malcolm Roberts said the gas industry supported rigorous cost-benefit studies for new pipeline infrastructure.

“Provided the business case stacks up, APPEA welcomes more interconnection and further steps towards a larger, more integrated national market,” Dr Roberts said.

“But is must be acknowledged that west coast gas is likely to be an expensive solution to east coast supply concerns.

“The reality is local gas will always be cheaper gas.”